The economy's new threat: Pantry deloading?

I don't normally listen to earnings calls by public companies, but I found myself tuning in to Pepsi's call last night for some reason.  Their sales are tanking, and their stock was rewarded with a healthy beating this morning as a result. But for all the depressing news, I learned something interesting - it's a phenomenon called "pantry deloading," and Pepsi execs blamed it in part for their slowing sales.

Simply put, in good times, we tend to over-shop. If something's on sale, we buy lots of it and store what we can (assuming it's not perishable, of course). Fill-up trips are bigger than they need to be, as each of us basically builds up a small inventory of frequently-used or sale-priced items.

Fast forward to today, where more people are trying to stretch out every last dollar. Instead of filling up (or over-filling), we're emptying out those stores of sale-priced items.  So instead of sticking another 12-pack of Mt. Dew in our cabinets, we're dusting off the old 12-packs that we so cleverly purchased and stored some time last year.  And when it comes time to replenish the dwindling stocks, some consumers will go back to the name-brand stuff, but others might be tempted to try cheaper private-label variants from their local supermarket or discount stores.  Still others will simply decide to do without altogether.

So there you have it: pantry deloading.  Any interesting phenomenon with real-world economic effects and a funny-sounding name :)

Tags: pantry deloading, shopping, retail, business

Gentle guidance is good marketing

Recently, Mass Mutual launched a new set of ads that they’ve been describing as “thoughtful.” When was the last time you heard a marketing campaign that was “thoughtful?” Aggressive, creative, innovative, suave, - sure, marketing comes up with every adjective possible, but "thoughtful" could mean you actually want people to think about what’s been sold.

That, I suppose, could be dangerous.

In reality, Mass Mutual’s newest campaign is much more than thoughtful. It’s smart. Taking back the notion of what really counts in life from those annoying MasterCard “priceless” ads, these spots show people making what are, subjectively, good decisions in their everyday lives. According to Forbes,

The campaign is an extension of the company's core position and tagline -- "We'll help you get there(sm)" -- that underscores the company's understanding of the real, practical issues consumers face when it comes to life insurance and retirement, and positions MassMutual as the company that helps consumers take the steps that are right for them.

Creative executions pose the philosophical and practical question: "What is the sign of a good decision?" The decisions captured in the executions are all real, almost everyday scenarios, like cutting short a fishing excursion to head for safe harbor at the first sign of a storm. Like real life financial decisions, the scenarios depicted all have consequences that can affect people beyond just the decision-maker. The campaign illustrates the value and confidence that come with making sound decisions for individuals and families, small business owners or plan managers at major corporations.

It doesn’t hurt that the ads have great soundtracks behind them (Bob Dylan on the one where a father decides to move his top-of-the-skyscraper-amazing-city-view office to his home after looking at a picture of his young daughter). Or that MassMutual puts a lot of family-friendly policies to the test in its own workplace. They've also sponsored a two-part documentary on PBS about retirement decisions and financial stability.

From a retail and advertising standpoint, engendered trust and a sense of guidance are some of the most difficult things to “sell” to customers. Not to mention that the company aims to do this at a time when established financial institutions are in trouble one way or another. The emphasis on gentle guidance is what works here – moving away from the hard sell to the simple straightforward assurance is the right move, especially for a company that could, in fact, play on people's anxieties in an anxious time. You can bet this approach won’t be appearing all over the advertising landscape, but it might not hurt for companies to stop and consider what exactly they have to offer that would make consumers choose one brand, one company over another. Brand loyalty is, of course, better if it’s actually earned.

Tags: advertising, branding, retail

Aldi to the rescue during crunch times?

I've never been to an Aldi store, but after reading Tim Manners's take on them in a recent Cool News of the Day post, I just might have to. Owned by the same group that owns and operates Trader Joe's, Aldi stores are apparently small, intensely focused on private label goods, and even more intensely focused on low cost. How low, you ask? Well, as Tim puts it,

"Aldi’s focus on cutting costs makes Wal-Mart look almost like Whole Foods by comparison. To save costs, Aldi doesn’t take checks or credit cards, it provides neither bags nor baggers and you even have to pay a quarter to use one of its shopping carts (it’s refunded when you return it, saving Aldi the expense of an employee to round up the carts)."

While such tactics might have turned off some shoppers in the past, with inflation rates rising and the government handing over billions of taxpayer dollars to fund bailouts of entities that should never have been allowed to exist in the first place, even upscale shoppers are looking for new ways to save a buck. Consequently, Aldi's has been growing by leaps and bounds, and expects to add another 100 stores in the US in the coming year, bringing their total to 1,050. Want a box of Raisin Bran for $1.50? How's about a frozen pizza for under $4? If so, Aldi's might be for you.

Me? I'm waiting to see what happens to the price of Trader Joe's (in)famous Two Buck Chuck before setting out to yet another new shopping destination.

Guess I'm just a creature of habit.

Tags: retail, shopping

Yes, it's back to school time again...

I said I wasn’t going to even mention back to school as a retail category, but here I am, unable to avoid it. My children get on the bus on Wednesday of this week. Yes, we spent money on school. And yes, we weren’t the only ones caught up in the hype despite our desire to stay on a budget.

I normally deny that I am at all moved by the calendar or invented retail "seasons." Just as bad as hearing Christmas music in the mall before Halloween is being hit with flyers and circulars for B2S specials while August is still in full swing and I’m still not done with the second of my three beach novels for the week. We typically try not to splurge on more than a new backpack or lunchbox and, as we moved to a new school system, some desk supplies required for each grade, but even that can be fun for the kids. The first two years we tried to get our school supply shopping done over the summer at all the fun, weird stationary stores in the little towns where we vacation. It’s nicer to have folders with college logos than the endless busy patterns and kittens from Target. But this year we didn’t get the list in time and, well, there are only so many varieties of file folders. So we hit the back to school forced march.

All summer I’ve been commenting on how much or how little I see people in retail stores. But there’s been a limit to my own retail research: I studiously avoided the mall until I had no choice (There were those three trips to the Genius Bar at the Apple Store, but that’s a story for another time.)

Media Post's Karl Greenburg reports that specialty retail stores are particularly hard hit this fall. Stores like the Gap are down, of course, but they were already feeling the pinch, as they say. Still, it was hard not to notice the difference in the mall: the Old Navy was strewn with clothes and long lines, but the Gap was relatively empty. The sales clerks looked forlorn as we walked by. Much of the kid retail, like the Limited 2 and TCP were hopping, as you’d expect, but the big department stores – from Macy’s to Sears – were relatively quiet. Let's hope the Gap's new celebrity-driven ad campaign can pull in some late fall shoppers who still need classics that last longer than the Old Navy "ten minute t-shirt," as it's called in my house.

On the other hand, despite my derision of the JC Penney and Sears campaigns to get teens to buy their clothes, the jaded teenager in my house noted that the JCPenny television ad that mimicked the Breakfast Club -- and the clothes it featured -- were, in her words, “not bad.” Apparently I was supposed to like it, too: "We knew parents would relate to it," says Chief Marketing Officer Mike Boylson. The ad also has a twist for today's tweens and teens: a remixed version of Simple Minds' Don't You (Forget About Me) from The Breakfast Club's soundtrack. The hook? “What’s old is new again.”

And unless my daughter develops a sudden need, I think I’m keeping my artic parka and Madonna gloves in the attic for a few more seasons, thanks.

Tags: shopping, retail, b2s

Mad Men and mind reading

AMC’s series Mad Men has been generating a lot of positive attention from critics lately. It’s a slick show set in the 1960s that follows the experiences of Madison Avenue Advertising Executives and the people around them. The New York Times review captures what everyone likes about it:

The advertising executives, who called themselves “mad men,” were at the front of the consumer rat race, hypnotizing the American buyer with huckster campaigns created off-the-cuff in smoky meeting rooms or on a cocktail napkin at El Morocco…. The advertising business was flush, blissfully unburdened by aging readerships, failing newspapers, DVRs or the Internet, and only barely accountable to the federal government or public opinion.

That kind of unbridled freedom is the series’s one speck of sentiment, evoking nostalgia for a time before the current audience-knows-best rule of business, in which viewers vote on who gets to become a pop star, publishers ask readers to choose their authors, and politicians ask viewers to decide what issues they should discuss, as is the plan in next week’s live Democratic debate, a joint project between CNN and YouTube. When Don Draper (Jon Hamm), the suave creative director of the Sterling Cooper Advertising Agency, receives consumer data from the research director that suggests there is no way to avoid addressing Americans’ concerns about the health risks of smoking, Don coolly drops the report in his wastepaper basket.

While some of the big agencies are still run by a few iconic personalities, for the most part it's quite different today. While at one time the industry might have been enthralled with some new creative campaign, data, analytics and big business practices grab the lion's share of headlines these days. Case in point: Brandweek reports that its parent company, Nielsen is partnering with Mindset Media to develop a method of tying consumer behavior (actual purchases) to behavioral data (personality mapping). The idea is to expand Nielsen’s ability to target types of consumers beyond surface demographic information. Retailers may know who buys what, but it’s hard to link that information with good answers to the “why” question.

Personality profiling is nothing new – and certainly the rise of the psychological mindset was important to advertising in the 50s and 60s, too. But today, agencies and retail companies adore it even though everyone admits it’s not an exact science and requires a fair amount of interpretation. But what’s most interesting about this announcement is Nielson’s attempt to link personnas with actual purchasing behavior -- people who allow Nielson into their home get to scan their purchases and then match their behavior against personality tests. On one level, this is good multi-method research, attempting to link actions and ideas. On another level, it’s based on a rather shaky premise, that personality is fixed, measurable, and drives consumption.

It’s not clear that today’s ad campaigns have a better fix on the human imagination than those Mad Men of the 1960s. Neither group really knows how people make decisions. The only research that could actually show this is long term ethnographic work, watching the same people shopping over a long period of time. Reacting to the Nielson news, Russell Jones from AlixPartner put it well when he said:

"The real question in my mind is this: How does it help me make branding decisions any better than the information I used to have? It doesn't tell me who I should target, although it tells me who responds to various brands."

It’s not clear what exactly Nielson and Mindset Media will find out. But I can tell them one thing: whoever came up with the retro-lighter package design for the Mad Men DVD boxed set was right on target.

Tags: retail, branding, advertising

Libby dusts off an old standby, the Family Meal

One of my main interests is people’s eating habits. The late writer Laurie Colwin once summed it up well:

“I’m not very curious about what people had out. I’m interested in what people have in, because I’m very interested in people’s domestic lives. I used to think I was fretting away my time, but the fact is, what is more interesting than how people live? I personally can’t think of anything. Maybe war or death or something, but not to me.”

I’ve spent a lot of time asking people who they eat with, what their daily meals are like, and how often they eat together as a family. So, I couldn’t help but comment on Libby’s new campaign to get families to eat more dinners together – and of course, to include Libby foods in those meals.

Parents and kids who visit the promotion's site will also find the "Top 5 Reasons to Get Back to the Table" (better grades, nutrition, confidence levels, etc. for kids); a database of easy, low-cost recipes featuring Libby's vegetables; and tips on planning meals and saving time and money at the grocery store - some from "Total Mom" author/TV personality Hannah Keeley.

Indeed, there’s definitely a new science that tries to support those claims. A recent University of Minnesota study found that adolescent girls who ate with their families at least five times a week during middle school were much less likely to drink, smoke or use marijuana five years later. The same, alas, did not hold true for boys. Even the researchers are not really sure what that means, so forgive me if I’m not quick to jump on the Return of the Family Meal Bandwagon. Most of the data shows that people do make an effort to eat family meals, perhaps not every night, but in a regular and sustained pattern. So why is Libby marketing nostalgia for something that isn’t really gone?

History shows that worries about family dinners come back like the tide whenever there’s certain kinds of social upheaval – let’s see which ones apply today: war (got that), economic downturns (got that), changes in men’s and women’s work and home roles (got that, too) and, oh yeah, rising food prices (got that, too!).

It’s really not surprising: concerns about the family are part of the social and economic concerns of the broader society. What even historians tend to forget is the role of advertising in helping to fuel those concerns, especially around the dinner table. In the early ages of advertising, the food industry tried to convince women that their performance as mothers and wives depended on choosing the best brand of canned foods for the family. Laura Shapiro, author of Something from the Oven convincingly demonstrates how into the 1950s, food ads were unusual in just how many kinds of insecurities they manipulated. After all, you need to be a Total Mom to be able to work 40 hours a week, deal with a budget, and come home and make dinner every night. That’s why advertising has always tied women’s maternal adequacy with a mix of “add love, but make it more convenient.” (I'd like to be able to say we've progressed enough for them to market this to the "Total Dad," too, but I'm not seeing any signs of that in these campaigns.)

So, Libby’s attempt to promote its canned goods in this manner is a longstanding cultural tradition. What’s different is that the tide has changed: it’s very difficult to sell canned vegetables today when fresh are shipped quickly across the globe, making asparagus available year round. So, tastes – or at least the arbiters of taste -- have moved away from the canned and towards the accessibility of fresh. The movement to get people to eat fresh, local food is gaining ground.

But Libby’s rather unabashed promotion of its canned vegetables flies in the face of so many things. At the same time, it recognizes that sooner or later, the ability to buy fresh and continue to buy whatever produce you want out of season may be more difficult for people under the economic crunch. It’s not surprising that the family meal has returned – articles about comfort food are just around the corner, waiting for the fall weather and heating bill crunch. As Libby rightly knows, smart moms are already thinking about stocking up on canned goods before the recipes start asking for pureed pumpkin. How about some pie?

Tags: retail, shopping, food

A new kind of retail shrinkage hits consumers instead of retailers

In a classic Seinfeld episode, Jerry and friends are staying at a beach house with people they don’t know well. George is changing his clothes and a woman walks in on him, looks down at his crotch, bursts into laughter, and runs from the room, with George yelling after her, "I was in the cold water! It’s shrinkage!"

While "retail shrinkage", the technical term for inventory loss occurring inside the store, is a universal problem, another kind of shrinkage stands to harm brands more than retailers... Like a dose of cold water on consumer pockets, another new trend in retail survival is package "shrinkage." A number of grocery products have been "outed" recently for the less-than-overt practice of making the contents slightly smaller and charging the same price, counting on the fact that consumers won’t really notice why the cereal or ice cream is running out a little faster than it used to. The amount is often slight -- a few ounces here, a few grams there -- but almost all the manufacturers have been very quiet about these changes. (Honestly, not that we expect them to brag about making things smaller when the trend has always been Bigger is Better. But it'd still be nice to know!) For the most part, it’s a lot easier to do this quietly rather than announce to consumers that prices are going up. And inevitably in the food industry, they are going up.

Consumer watchdog Mouse Print points out the Kellogg’s cereal has shrunk the box and reduced the calories on Apple Jacks, Corn Pops, and Fruit Loops, among other cereals. At least Kellogg’s is honest, including a little box on the side explaining why:

"This package change is considered a price increase, in that box size is smaller. The reason for the price increase is the rising costs of ingredients and transportation."

Ice cream has been a big culprit – dairy prices are way up and transportation and refrigeration depend on energy costs. Mayfield Dairy decided to tie the package shrinkage to their premium line of “select” flavors.

"With the price increases we are seeing in cocoa, nuts and dairy ingredients, we are facing a substantial price increase," said Scottie Mayfield, president of Mayfield Dairy. "Instead of raising our price, we have chosen to reduce the package size by 8 ounces."

Here’s another one: Earlier this year, Dial Soap shrank from 4.5 to 4 ounces. Who would expect tallow (cattle fat) to get more expensive, too? In this case, the new size was marketed as streamlined packaging (getting a grip on Dial for Men).

Although consumer watchdog groups and blogs have been commenting on the package shrinking issue for a while now, there’s not much industry tracking of the effect on consumers and spending. The Nielson Co. has information for their clients, but they’re not sharing it with the rest of us. One estimate was as many as 30% of packaged goods have gone to smaller sizes in the last year, but that data doesn’t tell us whether the price went up, down, or stayed the same.

The solution, unfortunately, for consumers, is to check the unit cost (price per ounce) on the things they buy. One analyst even recommends saving your cash register receipts and comparing them over months --- to use the point-of-sale data yourself rather than let the industry have all the fun. But that’s time consuming, and let’s face it, I'm not sure consumers want to extend the duration of their "retail experience" just to find out that they're paying more for everything anyway.

At the same time, I’m wary of encouraging marketing folks to give this a positive spin – like George and the laughing woman, it may be a futile exercise in damage control. Or worse, tied to questionable tactics: I can just see the tie-in to anti-obesity campaigns (shouldn’t we all be eating less anyway?) or environmental concerns (smaller packages mean less waste!). It’s hard to convince people things are better for them if they’re paying more for it, especially when we’re talking about staples like groceries. Americans in particular are used to spending a very small percentage of their income on food in comparison to people in the rest of the world. Like higher gas prices, higher food prices will require some adjustments from everyone, from the farmer to the producer to the retailer all the way to the consumer. I don’t particularly like paying more to keep the pantry full, but it’s one of the last things I’m going to sacrifice in my budget-trimming. I’m already buying the less expensive brand of shampoo, the generic household cleaners, and clothes on sale. And if I’m buying less at the grocery store, I’m still buying the things I think are essential, delicious, and part of our regular meal patterns. Isn’t that a kind of brand loyalty?

So here’s a novel idea for package shrinkage: be honest.

Tags: retail, shopping

Safeway's plan to target kids has parents asking "What's up, Doc?"

When my kids were young, we used to have a yearly event called Bad Food Weekend. One of us would take the kids to the supermarket and buy all the foods we saw advertised on television in between and blended in to the Saturday morning cartoons. We’d sample everything from fruit snacks that spurted out blue goo to cereals whose main ingredients were sugar and chemicals (with a vague reference to grains), to curly cheese doodles that turn your hands orange for a day. Usually by Saturday afternoon the girls had decided that 90% of the stuff was disgusting and one parent or the other was asked to make “a real meal.” Unfortunately, one year some nieces and nephews participated in the event, never reached the same gross-out point, and continued to ask for Sugar Coated Marshmallow Goodness in a Box for months afterward. My sister never forgave me -- I’m sure she’s sending her now-in-college son care packages full of carrots and whole wheat muffins just to counteract any lingering effects of that weekend long ago.

It’s easy to alarm parents (especially mothers) about getting kids to eat healthy foods. No surprise, as there’s more than a hundred years of "expert" advice – from the government, social service agencies, scientists, nutritionists, politicians, and of course, food companies --- telling women how to feed their families. And now, with fears of a fat nation starting in kindergarten, salmonella in your tomatoes, and Ronald McDonald as an exercise guru, the level of anxiety that must go into every meal is profound. Food vigilance is an around-the-clock job. In the last ten years, the obesity epidemic rhetoric has gotten fierce, starting with scientists at the Centers for Disease Control showing color coded maps of a creeping wave of fatness across the USA to Morgan Spurlock’s Supersize Me for kids. Whether you blame sedentary lifestyles, an out-of-control food industry, a lack of grocery stores and fresh produce in poor urban and rural areas, or parents (moms, really) who don’t make home cooked meals, it’s hard to ignore the statistics about type 2 diabetes in American children. Whether any of this warrants the label “epidemic,” there’s no question that the food industry knows it needs to start selling as much function as fun in their product lines.

So, it’s no surprise that Safeway, which like many supermarkets, food companies, and fast food chains, has launched a health kids set of meals and food products designed to ease parental guilt. Not a bad thing, you think, especially since one major complaint is that families do need guidance as to what counts as nutritional and healthy food. But unwilling to leave well enough alone, the new line will be packaged with Bugs Bunny and the rest of the Warner Brothers cartoon gang. According to Promo Magazine,

Warner Bros. chairman-CEO Barry Meyer said the deal is a way to turn its well-known cartoon characters into "ambassadors of health and fitness." He said the partnership "allows us to utilize the Looney Tunes characters' enduring popularity with kids and teens to promote a lifestyle choice that's healthier for them."

I wish I’d come across this story when I was writing the post about unbelievably bad marketing strategies, because it tops all the ones I’d mentioned. Like Sears hooking up with LL Cool J, there are some retail identities and pop culture items that really should be kept in separate rooms, locked away from one another. Otherwise we’ll end up with some crazy public service ads with the round green hero Shrek, (who’s been a fast food toy at least twice) promoting exercise. Oh wait, it’s been done.

(So do you think they'll use Porky Pig to promote the Soy Bacon Lettuce and Tomato Sandwich?)

To distinguish this campaign from the last thirty years of cartoon characters splashed across every imaginable kind of junk food, Bugs and his buddies are now exclusively featured on the Eating Right Kids line of food. Because Daffy, Taz, and Bugs are free of all that crass commercialism. Right?

Th-th-th-th-that’s all Folks….

Tags: branding, advertising, retail

Starbucks: closer to the end of Its universe?

Of all the stories about Starbucks, the best is comedian Lewis Black’s segment on the end of the universe, where he describes walking out of one Starbucks in Houston, only to see another across the street. Who, he wonders, would need two Starbucks within two steps of each other? After careful thought, he concludes that the only group would be people with Alzheimer’s. As Black says, “When you build a Starbucks across the street from another Starbucks, that’s it. Game over.”

Apparently the marketing and expansion plans for Starbucks must have been organized by folks who believe that people with memory loss are a growing segment of the population, since there are now hundreds of Starbucks within less than a mile of another. (There's even a great website with examples from around the country.) Even so, we still might be able to avert the end of the universe: today’s news is that Starbucks is planning on closing 600 stores across the U.S. Most of them are newer stores, (one analyst claims it’s about 20% of the stores opened in the last two years. While that affects approximately 12,000 workers, it’s not clear how many jobs will be lost overall, since some of these baristas may simply be transferred to the surviving store across the street.)   According to the Associated Press,

Starbucks estimated $8 million in severance costs. In total, the company forecasts up to $348 million in charges related to the closures, $200 million to be booked in the fiscal third quarter ended June 30... The locations were not profitable or were not expected to be profitable in the foreseeable future, and the majority had been opened near an existing company-operated Starbucks.

Two other bits of news signal a re-thinking of the “blanket the world with coffee” expansion strategies that have gotten Starbucks into trouble. One is that they are cutting back on their attempts to be a cultural marketplace, firing executives in the entertainment division and removing the large cd racks from the main store floor in order to concentrate on a few featured titles near registers. The second issue is with the coffee itself: the newer, mellower beans featured in Pike Place Blend have also been a source of controversy – not so good, say the majority of loyal Starbucks drinkers who prefer the more heavily caffeinated and “bolder” dark roasts that dominate the daily choices.

It’s no accident that Starbucks introduced this milder coffee at a time when both McDonald’s and Dunkin Donuts have explicitly challenged the coffee king with robust blends, cappuccinos, and lattes to go. Still, CEO Howard Schultz claims that Starbucks is holding its own ("we control our own destiny," he asserts) since he believes their coffee is better, more authentic, and fresher than the fast food competitors. But when you have the hubris to expand hundreds of stores directly across the street from yourself, perhaps it’s time to re-consider destiny and pull back before you're consumed by the black hole looming at the galaxy's edge. Here's a hint: it's not coffee.

Game over?

Image (inspired by Escher's Relativity) created by Alien Loves Predator.

While my Guitar (Hero) gently weeps

The last few weeks have had a lot of marketing and retail news that’s made me stop in my tracks and say, incredulously, “really? Are you kidding?” Despite a background in consumer research and design, I still consider myself a mere fly on the wall of marketing strategy. Still, there are some gleefully optimistic advertising campaigns that just call out for commentary. Here are three that Marketing Daily highlighted all on the same day, without a trace of irony.

First, the Corn Refiners Association has sponsored a new advertising campaign to try and convince women consumers that High Fructose Corn Syrup (HFCS) is not the evil substance behind the growing numbers of children and adults with type 2 diabetes. The ad campaign must convince consumers that HFCS is all natural (made from corn!) and no different than other sweeteners and that the American Medical Association has concluded that HFCS is no greater contributor to obesity than sugar. With my social scientist hat on, I’ve developed some critiques of the whole obesity epidemic scare and I do think most consumers are smart enough to realize that one item in their diet isn’t the cause. This is true no matter how ubiquitous the food is (just try doing your weekly shopping without buying HFCS and see what I mean). But HFCS has been deeply vilified by scientists, consumers, and policy-makers, while at the same time corn production has been heavily subsidized by the government. HFCS is a good stand-in villain for a host of larger problems within the food industry and culture. Any positive-spin ad campaign has to combat a whole combination of problems: a supremely bad reputation, a relationship to a non-sustainable public policy, the possibility that it’s probably not good to have any single food item appear so uniformly throughout our diet, and, the clincher I think, is changing women’s minds about what’s healthy for their kids. Unless HFCS is suddenly discovered to cure the common cold, I’m not seeing a whole lot of moms running out to buy more Lucky Charms based on this one, are you?

Second, an old but struggling stand-by has had a mid-life crisis: Sears has launched a new marketing offense aimed at bringing teens into the store, using LL Cool J and a new media blitz called “The American Mall.” According to the Associated Press,


“The American Mall,” produced by the team responsible for the tween-loved “High School Musical” series, is a massive cross-promotion between MTV and Sears.

Scenes for the 87-minute film were shot in a Utah Sears store. Characters wear Sears clothes, which shoppers can purchase. And the actors will appear in Sears advertisements and circulars. Meanwhile, Sears will sell the DVD and soundtrack in stores, while promoting the film and getting commercial time when the movie airs on MTV on Aug. 11.

While Sears may have some success with this approach, it’s not clear to me if it's going to distinguish their brand from the other mass of department stores and specialty clothing lines all vying for the mighty teen dollar. Even if Sears is no longer the place to get your washing machine or power drill, selling clothes to teens (in this tighter spending market, even) leaves the company with a fickle core consumer base and a lack of true retail purpose. Not to mention that it's Sears. And honestly, L.L. Cool J?

Finally, the one that gets me off the observer's wall is the news that two game companies are potentially vying to create a Beatles version of Rock Band and/or Guitar Hero. Sony, Apple Records and EMI own the rights to the majority of Beatles titles and they have been notoriously careful with licensing Beatles songs for commercial use, even keeping them off iTunes for an unbearably long time. (Remember all the flak Michael Jackson took when he owned a larger chunk and we got Revolution-backed commercials?) Rumors of licensing agreements reappear every few months -- when, for example, the original iPhone release featured “Lovely Rita” coming from the phone. Recently, American Idol featured a Beatles Week, where certain songs were performed with permission. Similarly, Cirque de Soleil’s LOVE show in Las Vegas was backed by a 78-minute collage of Beatles tunes, orchestrated by Sir George Martin. And then, of course, there was Across the Universe, a Beatles-inspired version of Hair for the Lion King generation. But if the rumors are true (and the rumors are, themselves, a pre-marketing campaign), many of you will be listening to Helter Skelter played by the wannabe rock star in your living room – before you’re able to download Lucy in the Sky with Diamonds onto your iPod.

Tags: retail, marketing, advertising

When the brand isn't enough

Following up on Annie's post yesterday about when brands matter (and specifically brand packaging, in that particular case), I came across this article at Media Buyer Planner that suggests that under the right economic circumstances, the "luxury" aspect of a name brand may outweigh the potential value that habitual buyers place on the brand. To wit:

A sizeable 42 percent of consumers say they have given up favorite food brands because of rising prices and economic concerns, according to a study from Information Resources, Inc. that shows the lagging economy is driving a dramatic move back to basics and a reversal of decades-long trends for convenient and healthier foods, writes MarketingCharts.

Though changes in shopping and purchase behavior vary based on life stage and presence of children, those with lower-incomes report being the hardest hit (see chart):

• Roughly half of all consumers with incomes less than $55,000 per year say they have trouble affording the groceries they need.
• Nearly a quarter of those earning between $55,000 and $99,000 also say so.
• Among those with incomes over $100,000, 16 percent report having trouble.

As a result, consumers are increasing purchases of basic ingredients and meal components, reducing restaurant spending and decreasing purchases of “non-essentials” (see table):

• 53 percent of consumers report that they are cooking from scratch more now than they were six months ago.
• About 59 percent say they are buying fewer single-serving products.
• 55 percent say they are buying fewer prepared meals.
• 52 percent say they are buying fewer organic products.
• Stores are seeing a resurgence in sales of frozen foods, perishables, and “center-store” items.
• Private-label products show strong gains, with 50 percent of consumers saying they have stepped up their spending on such products in the last six months.

Despite America's love affair with food, at a certain point the economic pain becomes such that items that were once thought of as essential get reclassified as not really necessary, and thus, luxuries that can be cut back on.

What does that mean for the grocer or food retailer? Well, it depends on how they're handling their product segmentation, and who their target customers are. Obviously those catering to the upper-middle class will be hurt less, as fewer of these people have (so far) reported having any problems. That means they probably haven't cut back on luxury spending yet (or, more accurately, they haven't needed to reclassify brand-name food item purchases as luxuries yet). For the rest, though, the news might be more sobering. One possible exception is grocers with strong private label brands. For a lot of these guys, their private label is becoming a high-margin and increasingly upscale brand that can stand head-to-head with more established name brands while still offering strong value to the consumer. As consumers continue to tighten their belts (figuratively), expect to see more of them hold off on tightening their belts (literally) by trading brand loyalty and perceived brand value for the bona fide value that high-quality private label brands can offer (note that crappy off-brand goods probably won't get a boost in this case, which is as it should be, if you ask me).

Tags: branding, private label, retail

The Gap is good TV-free, but Old Navy needs a rescue-at-sea

I'll tell you the moral of this story up front: sometimes not advertising is a great way to advertise.

Advertising Age recently noted that the GAP continues to eschew television advertising as part of its overall marketing plan. While this allows the company an 18% savings in advertising expenditures, it coincides nicely with GAP’s recent profitability (up 40% according to some sources). A quick look at the numbers shows that the original GAP brand and Banana Republic are moving out of a sales decline, while the lower-priced line Old Navy struggles along. Given the fact that the GAP line is mostly promoted in print magazines and billboards, much of their overall corporate TV ad budget goes towards Old Navy. You might think there’s a direct correlation here (Less TV = Better Sales) and while there’s certainly some relationship, it’s worth examining some of the other branding variables for both lines before we pinpoint the exact cause of death on a still-breathing corpse.

First, Old Navy has been struggling with its product line for some time now. According to the NY Times:

Last month, the company said its lower-cost Old Navy chain had become too fashion-oriented, with an emphasis on youthful women’s clothing that put off customers shopping for basics. Weakness at the chain prompted the departure of its president, Dawn Robertson, in February.

President for less than two years, Robertson’s strategy of aiming for a younger market and hiring designer Todd Oldham to create new products never really stood a chance. Oldham’s safari-themed prints are still bulging out of the half price rack and it’s the end of May -- an eternity in Old Navy turnaround.

Down the street at its sister store GAP, though, a considerable amount of energy and money has been spent on re-shaping the brand with social consciousness recognition. The (PRODUCT)Red campaign was mainly done through print ads, with famous do-gooders wearing the Red line, to raise awareness and money for HIV/AIDs research and health care in Africa. Despite criticisms about how many of these funds actually make it to direct aid and sluggish sales early on in the campaign, the imprint of celebrity charity literally adhered to the Red line at GAP. More recently, the company is going to sponsor a conference on international child labor campaigns, as much to raise awareness as to save face after watchdog groups targeted child labor in Gap-contracted factories in Dehli.

Finally, in a slightly safer vein, GAP’s latest venture is a line of art t-shirts designed by an array of artists connected with the Whitney Biennial. Most are well known and already well compensated (Chuck Close and Kiki Smith), so it’s not clear what “support for the arts” means in this case (“allowing more people access to fine art,” was one suggestion, although $38 a t shirt is still out of the ordinary joe’s price range).

The strategy is still a hit, though, since it hints at the charitable and social consciousness vibe and certainly stays in line with the tastes of GAP’s main customer base in the educated upper middle class. While these folks are also pulling back spending, a combination of selling the basics and selling a message may keep GAP itself afloat.

So why is Old Navy sinking? You’d think the lower cost line would be thriving in recession times, especially when merchandise gets moved through the store and discounted at such a fast pace. Summer clothes are already in the half off racks, but I see fewer people in the store every time I walk by. Yes, the teen market is definitely sluggish right now, but an even bigger problem is that Old Navy has no identifiable style, since it shifts and re-shifts its product line so quickly. There’s too much variety with no coherence. More importantly, no single product remains to be the “signature” piece drawing shoppers back inside. Variety is not always the spice of life.

The real genius who’ll throw Old Navy a life line needs to come up with a single print or television campaign that will not sell merchandise, but link the brand to something beyond its retail doors. (Currently, the closest they get is a charitable donation incentive if you fill out their online survey after shopping there. As one financially savvy teen commented as he went through the checkout, “yeah, sure, so YOU can get the tax break.”)

Until then, GAP’s management is right to save money, avoiding celebrity commercials or campy ads with kitschy references and focus on getting the merchandise connected to a loyal consumer base. Their bet on out-of-home media also seems apt, as more retailers pump ad dollars into posters, billboards and other below-the-line media every day.

But even great cause marketing and the right choice of media won't be enough to save everyone... Right now, shoppers need a pretty solid reason not to limit themselves to department stores, where they can save time and gasoline and the clothes actually last more than a single season. So until Old Navy finds their special purpose, it might be best for them to keep those advertising dollars in hand.

Tags: advertising, retail, out-of-home

Wii Fit for charity in New York City today!!

If you missed your last local Wiimbleton contest, this might be a chance to redeem yourself -- at least if you live in NYC, as Marketing Daily notes:

Nintendo, whose U.S. headquarters is based in Redmond, Wash., will host an all-day event at the park's Merchant's Gate near Fifth Avenue intended to coincide with National Fitness and Sports Month. The event to promote the home video game system will center on live demos of the Wii Fit and Wii Balance Board.

The game maker will offer up some 40 different Wii Fit activities for consumers to try out; for every demo, the company will donate $5 up to $25,000 to the American Heart Association. On hand will be company brass and various luminaries from the American Heart Association.

The piece also reports that Nintendo is working out a deal with Westin Hotels to offer the balance board as an exercise option for its customers. Although I got my yoga mat for Mother's Day, given the new luggage restrictions on airlines, I think I'll leave it home next trip and give the Wii Fit a try instead of waiting on line for the treadmill in the fitness center!

Tags: wii, retail

Safeway takes its private label public

Private label brands have become a staple at grocery stores, big-box retailers, discount warehouse clubs, office supply stores and pretty much everywhere else you can think. While private label items were once sold as the low-cost alternative to higher price, higher-quality items, today the items typically carry a small but still appreciable discount over their name-brand cousins, but at a price that is similar to and sometimes even exceeds that of the higher-priced goods.

Grocers in particular have jumped on the private label bandwagon, as goods stamped with their own name can often bring in 200-300% more gross margin than similar name-brand products which can be pretty significant when margins hover in the low- to mid-single digits.

Interestingly, some private label goods are doing so well, and have such a positive reputation in the marketplace, that they're starting to become full-fledged brands of themselves. That's precisely what has happened to Safeway's O Organic and Eating Right brands, as Supermarket News notes. Both brands have seen sales surges recently thanks to renewed interest in healthy eating and of course the gigantic sales monster that is organic. Just last week Safeway's CEO noted that O Organics recorded 2007 sales of $310M, and is expected to do $400 million "with ease" this year, with sales in the first quarter alone up 50%.

Wanting to capitalize on that trend, the company is going to be selling some of the products in this line to other grocers and retailers, who will basically treat it like any other name brand. To do this they're forming the Better Living Brands Alliance, which includes, "manufacturing, marketing and distribution companies as brand licensees; co-pack and distribution partners to provide a supply chain network; and support from EMAK Worldwide, a group of marketing agencies based in Los Angeles, for communications with consumers, and Crossmark, a professional services company for consumer goods based in Plano, Texas, for communications with retailers."

Safeway is taking a bit of a risk here by stepping outside of its typical role as a retailer and entering the murky world of product distribution and sales, however given the margins they're probably making on the O Organics and Eating Right goods, it may be a great hedge against store traffic slowdown or average ticket size decrease due to economic uncertainty and slowdown. If nothing else, it's a savvy play to try and take advantage of our current craze over organic and (perceived) higher-end foods.

Tags: private label, shopping, retail

Eating Chinese, Shopping Italian, Paying Global

Whole Foods "Groceraunt" Pushes Variety to the Limit

Many people (myself included) have a love-hate relationship with Whole Foods. The premier natural foods supermarket does what it does all too well: from the minute you walk into any of the stores to the time you go through the checkout line, you are surrounded by beautiful food in an environment that doesn’t beat you over the head with the fact that it’s a mega-market. But there’s a bit of self-righteous overzealousness in the air, especially as they vacillate between promoting big scale global organics alongside a newly popular "eat local" dictum. It's hard to stay morally pristine when food prices – especially for organics – are rising.

Back in the 1990s, when my local Whole Foods was still a small chain called Bread and Circus, we would often go there for special cheese sampling events, a smoothie from the juice bar, or sushi-to-go. Once we even took friends and had a rather tipsy pre-Thanksgiving all-day tasting of organic turkey, wine, appetizers, desserts, and condiments. When WF took over, they did away with the juice bar and expanded the hot foods section. We got in the habit of stopping before long driving trips, stocking up the cooler with specialty sandwiches, hummus, fresh fruit, cookies, and drinks. Our current Whole Foods competes mightily with a local supermarket, Giant Eagle's Market District, each offering weekly dinners you can take right out the door and serve to your family or guests.

The newest Whole Foods in Scottsdale Arizona takes the ready-to-eat offerings up two or three notches, and comes up with a new word for the approach: "groceraunt." Some folks think this will be a great new term, though for me it brings to mind my grey haired Aunt Iris wearing a grocer’s apron. But even Aunt Iris -- a great cook, mind you -- could never offer so many options, including huge, wide-screen LCD TVs, televising cooking lessons and a station where staff will grill or smoke your fresh meats and vegetables for you. Dinner at my aunt’s house also did not include a Tapas bars, wine and cheese tasting, or seasonal draft beers, all of which the new store offers. Capping things off, The Scottsdale concept store has a pizza making spot, Latin and Asian hot foods bars, and a café with baked goods and coffee.

Given what they’re putting together, I can’t help thinking we’ve already got a name for this: food court. Oh, you say, it’s in a grocery store so it’s different. But people have been shopping and eating in supermarkets like this for at least two decades (and before that, especially if you live in a city and shop in local, neighborhood stores rather than malls!). For people who don’t like fast food, the ability to grab a container of berries from the produce section, bread from the bakery, and then prepared foods is a way of life, not a big surprise.

I’m just amazed that so few of these places have added wireless -- Wegman’s is one of the few that does. Here in Pittsburgh, Giant Eagle has increased its organic and prepared foods, but also gone in the other direction: GE Express are smaller, well placed grocery stores with a reduced set of supermarket offerings, lots of meals-to-go, and a small wireless café, all connected to a discount gas station.

Indeed, the new concept WF will probably do very well in upscale locations like Scottsdale -- areas with many professionals who work 24/7 and have lots of disposable income. But I hope it’s not a general strategy, tipping the balance towards “bigger and more” rather than “specialized and better.” With transportation costs soaring and world-wide concern over key food crops (rice shortages, stalk rust on wheat, subsidized corn production for biofuel, and high priced dairy), all grocers are going to have to reign in some of their expansion.

In one way, WF’s gamble may pay off big, since their clientele have always been willing to pay more for perceived health and prestige benefits. But getting bigger won’t do much for their "Whole Paycheck" nickname, which will only be amplified as prices for organic and conventional foods go up with energy costs.

What’s great about this concept is what’s great about Whole Foods in the first place: good food, good quality and lots of choices. But there must be some limit to the variety that such chains can offer (or that consumers demand). Perhaps I am rejecting both my American consumer and market researcher hats when I say too much variety is simply too much. It all sounds good – but does it really benefit anybody? And will it remain a necessity when producers and consumers are going to have to begin balancing the costs with the growing demand for organic and natural foods? Whole Foods already has the structure and philosophy in place to sell in line with a more local and seasonal approach. The Groceraunt, in its first incarnation, seems to be going in the wrong direction. Still. I’d rather see more of these than fast food restaurants popping up at department stores, malls, and rest stops, but I expect that even a significant growth for the former isn't going to have much of an impact on growth of the latter.

Tags: groceraunt, retail, shopping

Teens turn to thrift as jobs vanish and prices rise

I tried to think of a better headline, but the one from USA Today is pretty complete. Quite simply, fewer teens have the high-paying jobs and access to cheap transportation in order to still be able to afford that $150 Coach wristlet handbag or $100 designer jeans anymore, and that spells big trouble for retailers who count on a steady stream of free-spending minors in order to turn a profit. Instead of bemoaning the end of an era (and let's face it, most of 'em probably didn't even realize that such easy access to cash isn't actually normal), some brands and media are instead trying to capitalize on being frugal.

That's right, my friends. Thrift is in.

For example:

Last week, Ellegirl.com, the teen offshoot of Elle magazine, launched a new video fixture called Self-Made Girl, which shows teens how to make clothes and accessories. The first video offers tips on how to create a prom clutch.

"It's a little tacky in the economic unrest to tote a big logo bag," said Holly Siegel, the site's senior editor. She said it's no longer about teens "one-upping each other," but rather where they can get it cheap.

Victoria Bradley, a 16-year-old from Springfield, Mo., says the $80 she earns each month from baby-sitting is being eaten up by more expensive school lunches, late-night snacks with friends and stylish clothes.

Now, she says, she and her friends head for the thrift store or just browse at the mall.

"I used to be able to buy a T-shirt and jeans every couple of months," Victoria said, adding some of her friends are even "making their own clothes or altering their old ones to fit or look better."

Victoria's mother, Michelle Bradley, said she and her husband cut back spending on themselves last year, and early this year also started paring back "frivolous" buying for their three girls.

Now, I'm a consumer, and while I do tend to live pretty simply I admittedly enjoy some creature comforts. So I'm certainly not going to get on a pedestal and talk about the timely demise of conspicuous consumption or anything like that. The fact is, economic slowdown isn't usually good for anyone, even if it does knock some of the wind out of annoying nouveau riche and get people to pile a bit less debt onto their already overburdened credit cards.

As expected, some of the big brands are already starting to feel the effects of the belt tightening, with American Eagle and Tween Brands Inc. (who operate Limited Too) already posting lower profits and revising their forecasts downward. The good news is that those who can provide more affordable luxuries stand to win a bigger slice of the remaining money out there, and perhaps a new crop of customers that they might not have otherwise had access to. Aeropostale and H&M are typically put into this category, but thrift stores and second-hand clothing stores are feeling significant growth, and that's only going to continue if the glow surrounding thrift continues to wear down the stigma of shopping for used clothes.

Tags: retail, shopping, finance

Brave New World revisited: Blissful ignorance, like Soma for consumer regrets

“The warm, the richly colored, the infinitely friendly world of soma-holiday. How kind, how good-looking, how delightfully amusing every one was! "
- Aldoux Huxley

We all know someone like this, be it a friend, a co-worker, a sister, in-law, or favorite cousin: At a restaurant with this person, whatever they order, it’s going to get sent back to the kitchen.

My special someone like this – let’s call her Heidi – always, always, always wants her steak done differently, her fish without sauce, and her sandwich without mayonnaise, even if she ordered it that way in the first place. She could find a dirty spot on lettuce that has been put through an industrial dishwasher. And then there’s Heidi’s partner, Stan, who likes to buy things at Costco, bring them home, and then take a few weeks to decide if he really likes them. He put a flat screen television on his American Express card a few months ago, watched the Super Bowl, decided it was too small, and back it went. Picky eaters, buyer’s remorse, indecisiveness, rejection, and regret are anathema to manufacturers and marketers alike. Wouldn’t it be great if you pre-empt or eliminate this, without perhaps, lacing the water supply with mood-enhancing drugs?

It might not be necessary, according to a study done by professor of marketing Dhananjay Nayakankuppam at IU, which found that people don’t want to know too much negative information about their purchases. The study used three fairly typical experiments on consumer choice: two consumer tests on chocolate and hand lotion, and then a video rating experiment.

Researchers dubbed their finding the “Blissful Ignorance Effect,” but they might as well have called it, “the Marketer’s Dream Study” because it’s so keyed in to what the marketing world wants to hear about its clients – less is more and the image is all.

But if you look closely, the key point is this: “once people commit to buying or consuming something, there is a kind of wishful thinking that happens and they want to like what they’ve bought.” I wonder: is that such a complex insight that needed a funded study? Give me some chocolate and unless it tastes like cardboard (or is shaped like something hideous), it’d take a cataclysmic event to get me to regret eating it. I mean really, chocolate?!!! What is there to regret? Nayakankuppam says, “We want to be happy with our decisions.,” and points to people’s emotional attachment to their purchases. But it’s false reasoning (or wishful thinking!) to apply those insights backwards to the original decision-making process and suggest people don’t need the information in the first place.

What marketers often fail to consider is that all material things – especially consumable goods – have a biography and history. Marketers focus on brand loyalty a lot, but the truth is, it’s much more complex, especially when products are relentlessly and continually altered and labeled “new.” The unending quest for newness has to be countered by something, perhaps either regret or blinders, just so people have a chance to move on! Case in point: I’ve just barely begun to enjoy my latest cell phone or my laptop and there’s a better version of it out there. Yes, technology changes fast. But does that mean I don’t want information about it? Certainly not AFTER I bought it.

What is lacking in this study is context. After all, if people professed to be unhappy with their purchases, would that be better? Are consumer experiences really divided only into angry regret and blissful ignorance? One key question the UI researchers neglected was whether they’d go back and buy the same product again.

Consumers have the unenviable conundrum of having both too much and too little information. From chocolate to hand lotion to DVD players, how much does any of us really know about the exact process by which they are made (ask and I’ll be happy to tell you all about chocolate)? The only time it’s transparent is when there’s a problem (lead paint) or the production process is part of what’s being sold (the market for green or sustainably-produced goods, for example). So much information that comes with advertising is not useful or not clearly authoritative. Ignoring bad feelings or second thoughts after a purchase is probably a great safety mechanism for our overloaded brains. Simplicity is good, but not because consumers are whacked out on soma, but because they’re bored with too much useless info and a lot of pressure to move on to another purchase before they’ve had much time to enjoy the one they’ve got!

Now eat your soma, I mean chocolate, and be happy.

Tags: retail, marketing, advertising

Wal-Mart learning from P&G in India

Back in August of last year the Wall Street Journal had an interesting and insightful article about the predominant shopping styles in India, and in particular how many preferred the "controlled chaos" of traditional markets and stalls to the sometimes antiseptic Western approach to the task.

While it's still a bit too early to point out lots of success stories from big Western chains finding their way in the subcontinent, the biggest of them all -- Wal-Mart -- has already decided that they're going to have to enlist some pretty serious help if they want to stand a chance in the fiercely-competitive retail landscape. That's why, according to this article from The Economic Times, they're studying longtime-partner P&G's data on the Indian market while revising their own strategy:

Globally, the relationship between [Wal-Mart and P&G] goes well beyond a vendor-retailer relationship and P&G has offered to share its understanding of the Indian market to help Wal-Mart in building efficiencies in supply chain and merchandising for its cash-and-carry business.

Senior officials at P&G told ET that its India unit has shipped its first consignment of personal-care products to Bharti-Wal Mart, a joint venture for the cash-and-carry and logistics initiatives.

While the joint venture will focus on B2B business, the Bharti group plans to launch small-format retail stores shortly. The officials said P&G India is helping Wal-Mart understand the nuances of doing business in India. Wal-Mart’s India exposure has been so far restricted to sourcing from the country for its global operations.

Considering that something like 95% of all trade falls outside of what's considered "organized retail" in India, it's clear that even Wal-Mart would have a pretty hard time trying to move into the market with their large- or super-sized stores. Taking a page from Indian retail entrepreneur Kishore Biyani's playbook, a focus on hyperlocal markets might be the best way for the retailer to establish a foothold with the core population in that country.

Tags: india, retail

Still shopping in the Paleolithic age

So a new study from the Wharton School at the University of Pennsylvania suggests what we all think we know: men and women are different kinds of shoppers. The study claims men shop with a purpose (hunting?) while women treat shopping as a total experience (gathering?). Not surprising really, especially when you consider that women do the vast majority of shopping for themselves, their family members, their friends and relatives, and the household itself. Of course women say they spend more time and thought in stores – they have to!

This kind of study makes me put on my Certified Gender Research Scientist hat and squint hard: on the surface, what you see is what you get. But look a little deeper and the gender knot unravels. What do we know in the world of gender studies that market researchers and MBAs do not?

Indeed, there’s always something that feels like truth in stereotypes. That's how they emerge in the first place, as a handful of superficial observations that eventually morph into a blanket over a whole group. I know plenty of men who zip into stores, get what they need, and get out. But then there are those other guys who take forever picking out a new jacket or a pair of running shoes. Heck, sometimes it’s the same guy – it just depends on what he’s shopping for. So, why does the stereotype exist – and why did the men interviewed about their shopping habits spew back what the researchers wanted to hear?

We’ve known since the 1970s that there are two kinds of gender effects in survey research. First, if the researchers are looking for differences between men and women, they will find them. It’s incredibly rare for gender research to turn up findings that oppose what the researcher set out to find (and this is not true for other kinds of research, so it’s something about our deep seated beliefs about the differences between men and women). Second, there's an effect that comes from this great concept called 'social desirability.' Here's one guy's version: "There's such cultural phobia about looking feminine, most men won't admit to liking shopping even if they do. Men are allowed to talk about buying cars, appliances, technology, and sports equipment. And maybe wine or beer." You want to appear manly? Then don't admit to non-manly behaviors -- especially in a co-ed focus group.

It’s too bad the "primitive psychology" angle was so attractive to the Wharton researchers (like others before them!). As any anthropologist will tell you, hunter-gatherer myths tend to play better in today’s ads than in the historical record. The Paleolithic analogy distracts from the truly interesting findings about sales staff: both men and women cared a lot about individualized service and problem solving by store clerks. Thus the study’s most interesting conclusion was ultimately its least surprising one as well:

"Retailers need to step up and deliver more sophisticated, segmented service… There's no such thing as customer homogeneity. We're not a homogeneous bunch at all. Yet as organizations, we end up treating customers as one big happy family. You've got all sorts of demographic and psychographic forces at play."

Even while concluding that consumption is deeply segmented, the authors still focused on gender differences as an easy approach to "solving" the segmentation conundrum. Unfortunately the slight differences noted by the researchers could tempt overzealous retailers into using sexist psychological sales tactics (wittingly or not). But imagine what could happen if these arguments started showing up as guidelines in corporate sales training manuals…

Tags: customer experience, shopping, retail

R/GA to open retail agency

Last year, Saatchi & Saatchi introduced Saatchi X to help Wal-Mart and others master the art and science of in-store marketing. This year, to get a leg up on competition preparing to follow along, Interpublic Group's R/GA is joining in on the fun and creating their own retail division. From this article at CNN:

"We think there is a great opportunity for retailers to create innovative and informative experiences as the cost of the enabling technologies continues to fall," said Bob Greenberg, CEO and global chief creative officer of R/GA. "By carefully integrating digital display and interactive technologies retailers can enhance promotions and help customers have a better branded and more meaningful shopping experience. Over the years we've shown that in-store digital strategies are very cost effective and profitable."

John Jones, 40, previously technical creative director, has been appointed executive creative director of the offering. He is charged with building up R/GA's retail capabilities, including in-store digital product displays, games and digital signage, plus overseeing the development of new methods of customer interaction. He will report to Nick Law, chief creative officer, NA, to ensure that the in-store experience is also a branded environment.

The firm certainly isn't a stranger to in-store work, having done all sorts of non-traditional marketing projects both at the store-level and elsewhere out-of-home, but this is the first time that they've articulated a more generalized approach to the market. Of all the interactive marketing, kiosk and digital signage projects that I've seen or heard about coming from them, I think my favorite has to be their promotion with Nike that allowed people in New York's Times Square to use their cellphones to build their own custom Nike shoe, and see the results on one of the Square's huge outdoor electric billboards.

So now that Publicis Groupe and Interpublic Group both have retail agencies in their portfolios, how long will it be before we see similar groups emerge under Omnicom and WPP? Sure, they both have a handful of companies that specialize in retail media measurement, research, and other critical but often less-than-sexy endeavors, but neither has a bona fide retail advertising agency... yet.

Technorati Tags: retail, media,R/GA,digital, signage,advertising